Almost every quiescent vertebrate cell has an organelle called the primary cilium. Cilia and flagella are among the earliest described subcellular structures; however, the primary cilium was long mistaken as vestigial. The primary cilia are now considered to function as cellular antennae for sensing a wide variety of signals, and defects in these organelles are increasingly being implicated in diverse developmental and degenerative human diseases called ciliopathies. Although, mechanisms driving ciliary assembly have been studied, the principles underlying ciliary signaling are largely unknown. The main focus of this proposal is to investigate the spatio-temporal organization of signaling in the primary cilium, and the unique features that have resulted in its widespread use as a signaling compartment. The primary cilium is indispensable for sonic hedgehog (Shh) signaling during neural tube development by regulating the downstream bifunctional Gli transcription factors. The cAMP activated protein kinase A (PKA) triggers proteolytic processing that generates Gli repressors in a cilia-dependent manner; however, pathways that promote PKA activation, and the exact function of cilia is unclear. We recently identified an orphan ciliary G-protein-coupled receptor (GPCR), Gpr161 that acts as a negative regulator of Shh signals and Gli processing via cAMP signaling. Active Shh signaling also results in removal of this receptor from the primary cilia. Thus, Gpr161 is likely to activate PKA by increasing ciliary cAMP levels, while also being regulated by Shh signaling in a positive feedback circuit. Our discovery of Gpr161 allows us to address the following outstanding questions in ciliary signaling. First, how are signaling molecules dynamically compartmentalized in the primary cilia? Second, what are the phenotypic consequences of disrupting signaling in the primary cilia? Our ability to uncouple distinct aspects of Gpr161's function, such as signaling, ciliary localization and removal from cilia, and study endogenous pools in cilia help us mechanistically dissect signaling in the context of intact cilia. Here, we propose to identify regulatory mechanisms underlying Gpr161-mediated ciliary signaling using integrative approaches. First, we will identify factors determining specificity of ciliary localization of GPCRs utilizing proteomic approaches with membrane-targeted ciliary localization motifs. We will test the role of these potential candidates in ciliar trafficking of endogenous Gpr161 using knockdown assays. Second, we will define mechanisms involved in Shh-dependent removal of Gpr161 from the cilia by identifying regions of the receptor that are necessary for this process, and study the cross-talk between Shh signaling, Gpr161 activity, desensitization, and endocytosis pathways. Third, we will study the developmental consequences of disrupting dynamic regulation of Gpr161 in the cilia, and test the role of Gpr161-mediated ciliary cAMP signaling during compartmentalized PKA activation in the Shh pathway. These experiments will establish a solid foundation for studying ciliary regulation and compartmentalization of GPCRs in developmental pathways.